PolyNovo Ltd [ASX:PNV] shares are rising today after the biotech stock reported its indicative half-year trading results.
A 45% increase in sales from this time last year was a highlight in PolyNovo’s trading update.
PNV also pointed to further signs of sales growth specific to several key global markets, including an increase in the company’s US accounts and sales.
At time of writing, the medical device developer’s stock is up 25%, trading for $1.79 a share.
Despite today’s spike, a broader view of PNV’s share price action shows the biotech stock is down 45% in the last 12 months.
But could today’s results signal a turnaround?
Only time will tell.
Let’s take a closer look at PolyNovo’s results to decipher what this could mean for PNV shares in 2022…
Record sales growth in the US market
PolyNovo is an ASX-listed company involved in the development of medical devices.
PNV says its products support a range of applications by using patented bioabsorbable polymer technology.
Given the size of the biotech industry in the US, it’s unsurprising PNV emphasised the sales growth registered in the US region in today’s half-yearly update.
PolyNovo reported that year-to-date sales in the US were $14.2 million, up 58% on the same time last year.
Q2 US sales were $8.06 million, up 31% on Q1.
In today’s announcement, PolyNovo shared their intention to capitalise on this growth by growing its US sales team.
Senior VP Sales & Marketing Americas Ed Graubart commented:
‘We have recruited top talent and they in turn are transitioning new accounts at a record pace. We have also filled some critical internal positions that allow for a more efficient and effective organisation. The team are buoyed by the strong results and opportunities.’
But what about the company’s projects in the rest of the world?
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‘Patchy’ results across Europe and the UK
Though PolyNovo posted strong growth in the US, results across the ‘major focus markets outside the US have been patchy.’
PNV said initiatives are underway to address this.
In a potential confirmation of how patchy the ex-US results were, PolyNovo did not reveal any sales figures for segments outside the US.
PNV did say that for the company as a whole, 1H22 total sales (ex-Barda) were $16.3 million, up 45% on same time last year.
Including Barda revenue, total sales were $18 million, up 43%.
Chairman of PolyNovo David Williams said:
‘While US sales are very encouraging, there is more to achieve as we still have new sales staff being onboarded and more staff to be employed. In addition, we are retraining existing staff to follow surgeon leads using the product in new indications.
‘While the US is the engine room of our growth in the immediate future, there are many opportunities in the rest of the world where we are just starting out.’
What’s next for PolyNovo?
While PNV’s recorded ‘patchy’ results outside of the US, today’s enthusiastic response from investors suggests the market thinks the US segment is the real prize.
It looks like continued growth in that region is what investors are after.
But it will be interesting nonetheless to hear more as to why PNV cannot replicate its US performance in other segments.
Of course, another way to look at the patchy ex-US performance is to perceive this as further room for growth.
As PNV’s chairman said today:
‘[W]hile the US is the engine room of our growth in the immediate future, there are many opportunities in the rest of the world where we are just starting out.’
But PNV is only one ASX medtech firm in a sea of many up-and-comers…
And there’s no assurances that one will perform better than another.
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